Ernst to study the quality of banks' service.

Ernst & Young is undertaking an international study of service quality that will look at retail banking and a handful of other industries.

The accounting and consulting firm will produce a report on banks' efforts to control the quality of their service, using information from in-depth questionnaires to 75 top retail banks in Canada, Germany, Japan, and the United States.

Focus of Study

The firm aims to answer such key questions as:

* What quality management practices are now in use?

* What can serve as the benchmarks of quality for the banking community?

Under increasing pressure to distinguish themselves in a crowded market, bankers have expressed a commitment to service quality.

"Yet the industry has not defined the concept or understood that quality improvement usually leads to cost reductions," said Robert Whitby, national director of financial services industry consulting for Ernst & Young.

Along with evaluating the service quality of banks, the accounting firm will look at the automobile, computer, telecommunications, and health care industries for its International Quality Study.

Interest in research on quality is on the rise. Several banks are reportedly scrutinizing their efforts as they prepare applications to compete for the government's highly acclaimed Baldridge Award, which recognizes outstanding quality from U.S companies.